Tonik energy interest

Nuggy96

Weird one to put in here. I just joined Tonik Energy who give 3% interest on balances up to £1000. Has anyone here with Tonik just put in a lump sum of £900 or £1000 in and taken the 3% interest?

bowlhead99

They have an arrangement whereby when you pay by direct debit, if the amount on your account that exceeds the actual cost of your energy will earn interest.

So, perhaps you could tell them that you're expecting an energy bill of £14,000 a year, so you want to pay them £1200 a month by direct debit and when your energy cost for the first month only comes out to £200, you would have £1000 'spare' going into the second month, earning a bit of interest. Then in the next month they would take another £1200 direct debit and your meter readings only show £200 again, so now you have given them £2400 total with £2000 now 'spare' on the account, of which the first £1k earns interest. And then in the third month ... etc

However, this would probably be thwarted by the fact that they say they will review and adjust your direct debit after the first bill has been produced and every 6 months thereafter.

If you wanted to use such a system as if it were a bank account deposit, it would rely on you being able to pick your own level of direct debit payment and having those DDs be infrequent (e.g. quarterly, 6-monthly), which they may not offer.

Also note there is no FSCS protection if Tonik go bust while holding your spare money in a positive account balance, as they're not a regulated depositary financial institution like a bank or building society.

AnotherJoe

I think this would be better posted in the energy forum

GiddyInvestor

As well as no FSCS protection power firms have been going bust quite frequently.